The Cambodia Chinese Commerce Association (CCCA) organised a networking event at the Urban Village Showroom in Factory Phnom Penh on December 19, 2023, to promote investment prospects in Cambodia to a variety of Chinese business communities, including from mainland China, Malaysia, Singapore, Taiwan, and Hong Kong.
The event featured a book donation ceremony with CC3, an introduction to Oriental Bank, and special presentations delivered by VIP speakers, including Dato’ Prof. Dr. Albert Tan, President of the Asia Pacific TOP Excellence Brand Committee (APC), who brought along a team of APC representatives from Taiwan and Malaysia; Anthony Galliano, Group CEO of Cambodian Investment Management (CIM), who offered insights into the current state of relations between the U.S. and China and what it implies for Chinese investment in Cambodia; Lee Yuen Fat, Chairman of the Hong Kong Federation of Innovation Technologies Manufacturing; and Serene Tan Pooi See from Singapore.
Two Memoranda of Understanding (MoUs) were also signed by the real estate developer, Urban Hub Cambodia, with advertising agency, ComZoneAsia, and property agent, DeGrand Realty.
Opportunities Cambodia Offers Chinese Investors: Low Tax And High Rental Income Returns
In an interview with B2B Cambodia, Dr. Ben Li, Chairman and Founder of the CCCA and Chairman of Urban Hub Cambodia, explained that the networking event was organised with the aim of addressing some of the pressing challenges faced by manufacturers in mainland China, Hong Kong and other Chinese communities. These challenges include high customs duties and U.S. sanctions on semiconductor products, which have impacted their ability to export goods to Europe and the United States.
“We Gathered today to Find solutions For this issue… everyone is finding out that the next ‘golden ten years’ will be in Cambodia, because Cambodia is the place where you can make your products and ship them all over the world with the lowest tax,” said Dr. Li.
Cambodia, however, still ranks comparatively low in Asia in terms of its logistics infrastructure, ranking well below neighbouring countries like Thailand and Vietnam on the 2023 Agility Emerging Markets Logistics Index, and 38th overall out of 50 countries.
Other key factors Dr. Li highlighted that make Cambodia attractive for investment were the ability to earn U.S. dollars as a functional currency, and the potentially high rental income yields. He affirmed that rental income returns up to almost 6 per cent are possible in Cambodia, which is significantly higher than most other Asian countries, however, this figure is on the high end and rates between 3.5 to 6 per cent should be understood as the norm.
“If you look at mainland China, the rental income is just 1.3 to 1.4 per cent, which is very low… rental in Greater Bay China is 1.2 per cent, in Hong Kong it’s around 2.2 per cent, in Singapore it’s around 2.5 per cent, in Bangkok it’s around 3 per cent, and then in Kuala Lumpur and Ho Chi Minh City it’s around 3.3 to 3.4 per cent, but in Cambodia, we’re talking about 6 per cent, almost four times of Greater Bay China and two times of Bangkok!” stated Dr. Li.
“The Chinese investors here today are all very interested in investing in Cambodia, and our association will keep on [holding events like this] and bringing in more Chinese investors to support Cambodia,” he added.
Facilitating Connections Between The Chinese And Cambodian Business Communities
The CCCA plays a major role in building the connection between Chinese business communities from mainland China, Taiwan, and Hong Kong and successful enterprises in Cambodia. Dr. Li shared that the association’s objective is to simplify the investment process and guide Chinese investors on how they can expand their operations to Cambodia. To do this, the CCCA provides tours, accommodations, and other opportunities for Chinese visitors to come and appraise the country’s business environment and also meet with already well-established companies.
“For example, my family’s business, ‘Goldfame’, is one of the biggest garment factories in Cambodia with around 30,000 workers, so [visiting Chinese investors] can come and observe how [such businesses] are successful here,” explained Dr. Li.
“At the same time they can learn from successful locally-based entrepreneurs and find out ways to invest in Cambodia. Our association is holding hands together with all these investors so that they can bring over their investments, establish factories easier and expand their businesses to get more revenue,” he added.
A large number of the guests attending the networking event had come to Cambodia for that very purpose in mind.
“Most distinguished Visitors Here Today Are very powerful people in mainland China… they have more than 3000-4000 workers in mainland China, Hong Kong or Taiwan,” shared Dr. Li. “But they still dare to come up on stage and tell everyone that right now, because of [Strained] relations between the U.S. and China, they are facing troubles so are coming to find opportunities in Cambodia.”
“When they talk to the people here, they see that people can speak English and Chinese very well, which impresses them a lot, and they also mingle with other Chinese members and find out that there are a lot of areas where they can cooperate, because we have construction companies, trading companies, logistics companies, insurance companies, and also big manufacturers,” he added. “They need all these local and international service providers to establish their own enterprises and ensure their companies are sustainable, so we are the ones to help link them up, lower their costs, find new revenue sources, and offer chances to find new business opportunities.”
Looking ahead to 2024, Dr. Li first acknowledged the many challenges faced in 2023 due to global economic uncertainties. However, he expressed optimism about Cambodia’s investment potential, believing that the post-COVID environment has opened up opportunities for the Kingdom to emerge as an attractive destination for Chinese investors to expand their businesses.
Dr. Li anticipates Cambodia will offer new hope in 2024 and beyond, providing a conducive environment for Chinese investors to thrive and ushering in what he referred to as a “golden ten years” for the country.
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